• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Trump signs bill easing post-2008 crisis restraints on banks

Rogue Valley

Rogue Valley

Lead or get out of the way
DP Veteran
Joined
Apr 18, 2013
Messages
94,071
Reaction score
82,294
Location
Barsoom
Gender
Male
Political Leaning
Independent
Trump signs bill easing post-2008 crisis restraints on banks

Trump_78343.jpg


5/24/18

WASHINGTON (AP) — President Donald Trump on Thursday signed into law a measure that loosens key restraints for banks imposed after the 2008 financial crisis and Great Recession. Savoring the legislative triumph, he called it "the next step in America's unprecedented economic comeback." The Republican-crafted bill passed Congress on Tuesday with the help of some Democratic votes and allowed Trump to fulfill his campaign pledge of dismantling the landmark Dodd-Frank law. The 2010 law was enacted by President Barack Obama and Democrats in Congress in response to the crisis that brought millions of lost jobs and foreclosed homes, and a taxpayer bailout of hundreds of billions for banks on Wall Street and beyond. The new law raises the threshold at which banks are deemed so big and plugged into the financial grid that if one were to fail it would cause major havoc. Such banks are subject to stricter capital and planning requirements.

The change eases regulations and oversight on more than two dozen financial institutions, including BB&T Corp., SunTrust Banks, Fifth Third Bancorp and American Express. But critics say the likelihood of future taxpayer bailouts will be greater now that curbs have been eased. They point to increases in banks' lending and profits since Dodd-Frank's enactment in 2010 as debunking the assertion that excessive regulation of the banking industry is stifling growth. "Today, special interests win again," Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, said in a statement. "The president signed into law a giveaway that loosens rules for the same big banks that helped crash the economy a decade ago, leaving Americans taxpayers responsible for a $239 billion bailout." Eventually, the exempted banks will no longer have to undergo an annual stress test conducted by the Federal Reserve. The test assesses whether a bank has a big enough capital buffer to survive an economic shock and keep on lending. The banks also will be excused from submitting plans called "living wills" that spell out how a bank would sell off assets or be liquidated in the event of failure so it wouldn't create chaos in the financial system.
Click to expand...

Basically, Trump & the GOP took us back to 2008 and the mortgage bubble scenario. Banks are flush with cash now in 2018 (a 27.5 percent increase from a year ago) so there was no pressing need to dismantle safeguard regulations. In addition, later this month five regulators are expected to release a plan to water-down the Volcker Rule which bans banks from making risky bets with depositors’ money. The winner here is Big Finance, one of the richest US sectors to donate bigly to Trump and the GOP.

I'll say it again. Conservatives unfailingly enrich corporations, and do nothing for Working-Class-Blue-Collar America.
 
From what I've heard on NPR today this bill isn't the boogie man many have made it out to be.
 
azgreg said:
From what I've heard on NPR today this bill isn't the boogie man many have made it out to be.
Click to expand...

It was unnecessary. The banking giants are flush with extra money and higher profits. Now we're back to where risky investments are again permitted (next month - terminating the Volcker Rule).
 
Rogue Valley said:
Basically, Trump & the GOP took us back to 2008 and the mortgage bubble scenario. Banks are flush with cash now in 2018 (a 27.5 percent increase from a year ago) so there was no pressing need to dismantle safeguard regulations. In addition, later this month five regulators are expected to release a plan to water-down the Volcker Rule which bans banks from making risky bets with depositors’ money. The winner here is Big Finance, one of the richest US sectors to donate bigly to Trump and the GOP.

I'll say it again. Conservatives unfailingly enrich corporations, and do nothing for Working-Class-Blue-Collar America.
Click to expand...

No way, you're wrong. Trump is fighitng for the little guy. He's draining the swamp and getting those Goldman Sachs bankers out of government.

I wonder what Trump would have to do for voters to admit he's not fighting for them. Maybe a huge tax giveaway for the rich? Nope, he already did that. Maybe no taxes for millionaires.

Don't worry, they'll just blame the next crash on poor people.
 
Nowadays they have what are called "bail-ins."

"What is 'Bail-In'?

A bail-in is the rescue of a financial institution that is on the brink of failure whereby creditors and depositors take a loss on their holdings. A bail-in is the opposite of a bailout, which involves the rescue of a financial institution by external parties, typically governments that use taxpayers money. Bailouts have been far more common than bail-ins. However, in recent years, and following massive bailouts, some governments now require the investors and depositors of a bank to take a loss before taxpayers."

https://www.investopedia.com/terms/b/bailin.asp

Thx :)
 
the stress test on our biggest banks was ended for all but 12 of the 38 who were previously subject to it
easing things so that the losses can be socialized once again
 
The Dodd-Trump legislation was passed on the promise that it would end 'Too Big To Fail', but, as is often the case in regulations that regulators write, it had exactly the opposite effect.

Dodd-Frank increase the rate of consolidation of small, local banks, who were never the risk to the financial system, into ever larger banks, capable of tipping over and causing instability in the US financial system.

Why?

It's expensive to comply with all the Dodd-Frank regulations, so banks looked to leverage those compliancy efforts and costs across ever larger enterprises.
The banks (and the regulators in their pockets) knew quite well that should a larger bank teeter on bad gambles, that the Fed would be there to rescue it, so why not gamble on risky behavior? Why not, when the Feds are there to pick them up, brush them, off, and send them on their way only to repeat it again.

So Dodd-Frank, and its thousands of pages of regulations, put the US financial system at greater risk, rather than lessening that risk.

Smaller local banks were never a source of risk to the US financial system as big banks were.

Opening the door so that smaller local local banks can compete, be cost effective, would be a real way to reduce the risk to the US financial system by increasing competition, and possibly reducing the size of 'too big to fail' banks that could put the US financial system at risk.
 
eohrnberger said:
The Dodd-Trump legislation was passed on the promise that it would end 'Too Big To Fail', but, as is often the case in regulations that regulators write, it had exactly the opposite effect.

Dodd-Frank increase the rate of consolidation of small, local banks, who were never the risk to the financial system, into ever larger banks, capable of tipping over and causing instability in the US financial system.

Why?

It's expensive to comply with all the Dodd-Frank regulations, so banks looked to leverage those compliancy efforts and costs across ever larger enterprises.
The banks (and the regulators in their pockets) knew quite well that should a larger bank teeter on bad gambles, that the Fed would be there to rescue it, so why not gamble on risky behavior? Why not, when the Feds are there to pick them up, brush them, off, and send them on their way only to repeat it again.

So Dodd-Frank, and its thousands of pages of regulations, put the US financial system at greater risk, rather than lessening that risk.

Smaller local banks were never a source of risk to the US financial system as big banks were.

Opening the door so that smaller local local banks can compete, be cost effective, would be a real way to reduce the risk to the US financial system by increasing competition, and possibly reducing the size of 'too big to fail' banks that could put the US financial system at risk.
Click to expand...

i agree the post melt down banking rules applied to the smaller lenders who were not committing the type, quantity, and size of bad credits as the too big to fail banks
relaxing those rules on them is a good thing
relaxing the volker rule and eliminating the stress test on 70% of our largest lenders under the guise of helping small banks is a payoff the the elite/banks
this opens the door to the return of socializing big bank losses
 
justabubba said:
i agree the post melt down banking rules applied to the smaller lenders who were not committing the type, quantity, and size of bad credits as the too big to fail banks
relaxing those rules on them is a good thing
relaxing the volker rule and eliminating the stress test on 70% of our largest lenders under the guise of helping small banks is a payoff the the elite/banks
this opens the door to the return of socializing big bank losses
Click to expand...

I don't necessarily disagree.

My main points are that big banks taking bad gambles is the risk, not small banks, and that Dodd-Frank's poorly written regulations prompted smaller banks to be gobbled up by, or becoming, big banks taking greater risks. Neither speaks well of the efficacy of Dodd-Frank's regulatory regime, which, by my estimation, was poor at best.
 
You must log in or register to reply here.
Back
Top Bottom